Minnesota appeals court overturns Sandpiper pipeline ruling

The Minnesota Court of Appeals has reversed regulators' decision to grant a certificate of need for the proposed Sandpiper oil pipeline, saying yesterday that state regulators must complete an environmental impact statement before the certificate can be issued.

The judicial panel ruled that a comprehensive environmental study about the pipeline's impact as it crosses northern Minnesota must be completed before the state Public Utilities Commission decides the pipeline is needed.

The decision means that after the environmental impact statement is completed, the commission may reconsider issuing the "certificate of need" it already approved on 5 June. If it is approved again, the commission may proceed to approve a specific route.

A spokeswoman for Enbridge Energy Partners, the company proposing the new pipeline, said the company feels it is the safest way to transport crude oil.

"The prior direction from the state was that there is sufficient environmental review within each phase of the regulatory process..." Enbridge's Lorraine Little said. "We will evaluate our options for next steps with this important project.”

The pipeline project

The US$2.6 billion, 610 mile pipeline from North Dakota's Bakken oilfields to Superior, Wisconsin, was previously deemed necessary and in the public interest.

A lengthy environmental review of Enbridge Energy's project was set to take place as officials determined the pipeline's final route.

But a three-judge panel of the appeals court said Monday that the certificate constituted a major governmental action, so state law requires the environmental impact statement be completed before that certificate is granted.

Enbridge Inc. and Enbridge Energy Partners, L.P. have announced two projects that will provide increased access to refineries in the U.S. upper midwest and in Ontario, Canada for light crude oil produced in western Canada and the USA.